Buying The Japan Times and Simmons: diversification on a light balance sheet (1996)

Diversification without capital

The 1996 acquisitions read as the design of an escape route chosen by a parts maker whose growth had stopped. The road to wider markets abroad was blocked by contract, and domestic vehicle demand would not rise. What remained was to place a source of earnings outside the core business — and to do it not by investing in plants but by buying companies that came with customers and distribution attached. The founding pattern of buying technology from outside and selling it at home had here advanced to buying the businesses themselves.

The two businesses chosen were opposites in character. The English-language newspaper was bound up with the personal interests of the chief executive; in scale it stayed alongside the core business and then disappeared from the consolidated segments altogether. Bedding held domestic demand unrelated to vehicle production, and survived as a segment beside components. In the year to March 2025, the beds and furniture segment’s ¥37.1bn of sales amounted to eight-tenths of Nifco’s entire consolidated revenue at the time of the acquisition.